Brazil’s the biggest city, São Paulo, finally has stopped short of a threatened ban on Uber in the city. The Brazilian city’s mayor said his administration will issue 5,000 medallions that accept hailing by smartphones.

“São Paulo has to stay ahead of the times” Mr. Haddad said. “We are taking an important step to improve service.”

Mr. Haddad said the medallions will be awarded by lottery within a few months, but only licensed cabdrivers will be eligible to compete for them. One quarter of the medallions will be reserved for women, who are underrepresented in the industry.

Drivers will be required to register with the city, submit to regulation and pay taxes. The companies that these drivers choose to affiliate with, including Uber, would be required to do the same.